Motorola should bring its China syndrome home

BEIJING — There's a simple piece of advice that, I have to admit, I sometimes can't force myself to follow: If you can't find something good to say, don't say anything at all.

This helps explain why I've been so quiet about Motorola lately.

The Schaumburg-based technology company has been stuck in "say nothing at all" status for a very long time.

The sort of person with nothing nice to say might remind everyone that Motorola has lost share in the cellular phone business, and 26,000 people have lost jobs. Such a Gloomy Gus might note Motorola just posted its first quarterly loss since the early 1980s: $533 million. Or that CEO Chris Galvin is fending off hostile investors and can't quite convince Wall Street he can save the company his grandfather founded.

But not me.

Let others look at the dark side. I decided I would find something good about Motorola if I had to travel halfway around the world to do it. Wouldn't you know it, I wound up here in Beijing.

Here in China, Motorola is the tiger's meow. Its $3.4 billion investment makes it the biggest U.S. investor here. The company tops the fast-growing cell phone market, and just persuaded cell phone giant China Unicom to sign a $407 million deal to use a cell phone technology in which Motorola excels.

Last year, sales from Motorola's $2 billion manufacturing plant in the town of Tianjin increased 37 percent to nearly $4 billion. Exports from China jumped 32 percent to $1.6 billion.

(Warning, not-nice comment follows.) The company is losing sales in low-end cell phones because it can't keep up with demand. Archrivals Nokia and Ericsson together control 40 percent of the market, compared with Motorola's 33 percent. So far, at least, (back to nice stuff now) Motorola has held the largest, highly profitable hunk of the business.

Motorola first invested in China in 1986, and almost single-handedly launched the cellular phone boom here.

Today, tiny, trendy Motorola cell phones are as much a fashion with Chinese cognoscenti as Mao hats were with their parents.

Motorola is moving to overcome production shortfalls by contracting with outside suppliers and expanding the Tianjin plant. It recruits and trains some of China's best brains, at all levels of the company.

Don't just take my sunny word. Listen to T. Lee Boam, head of commercial affairs at the American embassy in Beijing. "Motorola is selling China what it needs," Boam raves. "That's their simple secret." Motorola has a major research effort here that is turning out a new generation of promising products. Consider the Accompli. The new palm-size combination cell phone, fax machine, game machine and e-mail appliance was created in China, sells well here, and soon will show up in U.S. stores.

It's not all consumer products either. In a joint venture with Cisco Systems, the company is designing systems to augment the wireless Internet.

I saw the new technologies in a secure, steel room in the bowels of Motorola's shiny headquarters building in bustling downtown Beijing.

On an oversize screen, an animated parrot followed directions that were delivered via a cellular phone over the Internet. The "parrot" could just as easily have programmed a VCR, activated a home air conditioner, or even translated a text message from Chinese to English.

Jenny Wang, Motorola's chief representative here, says it's essential to conduct research in China. "If you don't do your best development work in this market, you will be very much reacting to the market, as opposed to pro-acting," Wang says.

CEO Galvin has gotten personally involved. Diplomatic sources say Galvin meets personally with Chinese President Jiang Zemin when he visits China, coveted top-tier access afforded to only a handful of foreign business leaders.

They also compliment his smooth handling of the cultural complexities of dealing with Chinese government and business leaders.

China won't solve all of Motorola's problems. Not hardly. But at least Chris Galvin has made an impressive, long-term commitment here.

Now it's time for him to build a success that's not half a world away.